Btcs corporate presentation july 2014 final

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1 Corporate Presentation (OTC QB: BTCS) July 2014

Transcript of Btcs corporate presentation july 2014 final

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Corporate Presentation (OTC QB: BTCS)

July 2014

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The following presentation is an outline of matters for informational purposes only. This document does not constitute an offer to sell or a solicitation of an offer to buy any

securities of Bitcoin Shop, Inc. (“Bitcoin Shop”, “BTCS”, “we” or “us”).

While we believe the information provided herein is reliable, as of the date hereof, neither Bitcoin Shop nor any of its affi liates, subsidiaries, directors, officers, employees,

agents and consultants (i) makes any representation or warranty as to the accuracy or completeness of the information contained in this document, (ii) undertakes any

obligation to update any information contained herein, except to the extent required by applicable law, or (iii) takes any responsibility under any circumstances for any loss

or damage suffered as a result of any omission, inadequacy, or inaccuracy in this document, except to the extent required by applicable law. The following presentation is

intended as a summary only, contains selected information and does not purport to be all-inclusive or to contain all of the information that may be relevant to a decision to

invest in our securities. You should not rely upon this document in evaluating the merits of investing in our securities. Any decision with respect to an investment in our

securities should be made based solely upon appropriate examination of our business, including an examination of our filings with the Securities and Exchange

Commission (“SEC”) and the “Risk Factors” contained therein.

The following presentation contains statements, estimates, forecasts and projections with respect to future performance and events, which constitute forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those

statements include statements regarding the intent and belief or current expectations of Bitcoin Shop and its affiliates and subsidiaries and their respective management

teams. These statements may be identified by the use of words like “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “will”, “should”, “seek” and similar

expressions and include any financial projections or estimates or pro forma financial information set forth herein. Prospective investors are cautioned that any such

forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected

in the forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include, without limitation, those detailed in

our filings with the SEC. Neither Bitcoin Shop nor any of its affiliates undertakes any obligation to update and forward-looking statements for any reason, even if new

information becomes available or other events occur in the future.

This document does not constitute and should not be interpreted as either a recommendation or advice, including investment, f inancial, legal, tax, regulatory or

accounting advice. You should conduct your own independent investigation as to the economic, financial, regulatory, tax and accounting implications of an investment in

Bitcoin Shop’s securities, and you should consult your own attorney, business advisor, accounting and tax advisor for legal, business, accounting, regulatory or tax advice

regarding an investment in Bitcoin Shop.

Bitcoin Shop files annual, quarterly and current reports, and other information with the SEC. Our filings with the SEC contain important information regarding Bitcoin Shop,

its business, financial condition, results of operations and prospects. You should assume that information contained in any of our filings with the SEC is only accurate as

of the date specified in such filings. Our business, financial condition, results of operations and prospects may have changed materially since any such date. You are

advised to carefully review the description of our business and the “Risk Factors” set forth in our Annual Report filed on Form 10-K filed with the SEC on March 28, 2014.

Summaries of documents contained herein and in our filings with the SEC may not be complete and are qualified in their entirety by reference to the complete text of such

document. In making an investment decision, you must rely on your own examination of these documents and such additional due diligence as you deem appropriate. We

have not authorized any other person to provide you with information that is different from the information contained in our filings with the SEC. If anyone provides you

with different or inconsistent information, you should not rely on it.

Our filings with the SEC are available to the public on, and may be reviewed at, the SEC’s internet website http://www.sec.gov and on Bitcoin Shop’s web site

(www.bitcoinshop.us).

You may also read and copy any document that Bitcoin Shop files with the SEC at the SEC’s Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549.

Safe Harbor

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Table of Contents

Section Page

Investment Highlights 4

Industry and Market Overview 5

Corporate Overview 12

Summary 23

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• Bitcoin Shop, Inc (“Bitcoin Shop”) is an early mover in the virtual currency

ecosystem and one of first U.S. publicly traded companies in the space

• We plan to build a virtual currency ecosystem by using ecommerce as an on-

ramp

• Bitcoin Shop offers over 140,000 products for sale and plans to expand its

product offerings and vendor base

• Bitcoin Shop does not have inventory or a logistics chain but rather leverages its

vendor’s resources

• Virtual currency acceptance and regulatory guidance indicates the potential for an

increase in opportunities within the industry

• Management team offers the right combination of capital markets experience,

industry expertise, and business leadership

Investment Highlights

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Industry and Market Overview

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• Ecommerce represented only 6% of total

U.S. retail sales in 2012 leaving significant

growth opportunities*

• Electronics and apparel/accessories

estimated to account for approximately 46%

of U.S. ecommerce sales by 2016*

• Books, movies and videos forecasted to

grow at 16.3% CAGR through 2017*

• Large retail categories like auto and

food/beverage have lower sales online

indicating room for growth*

U.S. Ecommerce Market Overview

25%

19%

12% 5%

4%

3%

2%

30%

Consumer electronics and appliances

Apparel

Media, toys, and games

Food and drink

Furniture and homeware

Beauty and personal care

Home improvement and home care

Other

U.S. Online Sales by Category

Source: Forrester Research, Inc.

U.S. Online Retail Forecast (billions)

Source: ATKearney The 2013 Global Retail Ecommerce Index™

$157 $176

$197 $218

$240 $259 $279

2009 2010 2011 2012 2013 2014 2015

*Source: “US Retail Ecommerce: 2013 Forecast and Comparative

Estimates”, eMarketer

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Universal

What is Bitcoin?

What is a cryptocurrency?

Bitcoin Ecosystem Bitcoin is the most mature cryptocurrency

A cryptocurrency is a type of digital

currency that relies on cryptography,

peer-to-peer networking, and

decentralization

Peer-to-Peer

Decentralized

Worldwide Network

Mining and

Cloud Hashing

Wallets Payment

Processors

Exchanges ATMs and

Financial Services

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Payment Processors

20.2%

Wallets 11.6%

Universal 31.7%

Mining Hardware

7.1%

Financial Services

7.6%

Exchanges 21.8%

Payment Processors

5 Wallets 5

Universal 4

Mining Hardware 3

Financial Services

10

Exchanges 14

Total $184.4 41 $4.5

Distribution of Venture Capital Investment

Investment Distribution # of Companies

Source: Coindesk.com, as of 5/21/2014

Sector Total Invested ($m) # of Companies Average Investment ($m)

Payment Processors $37.2 6 $6.2

Exchanges $40.2 14 $2.9

Financial Services $14 10 $1.4

Mining Hardware $13.1 3 $4.4

Universal $58.5 3 $19.5

Wallets $21.4 5 $4.3

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Coin Market Cap USD USD Exchange Rate Total Supply Features

Bitcoin

(BTC)

$6,832,636,557

$533.54 12,806,225 First and largest currency

Litecoin

(LTC)

$325,990,814

$11.39 28,610,704

Follows Bitcoin model, mining much faster

Peercoin

(PPC)

$52,487,480

$2.45 21,420,999 Socially responsible by using energy efficient

mining algorithm

Nxt

(NXT)

$36,862,856

$0.036863 999,997,096 First nationally sponsored currency (Cyprus)

DogeCoin

(DOGE)

$33,295,962

$0.000421 79,030,071,278 Typically smaller transaction sizes

Ripple

(XRP)

$27,611,016

$0.003532 7,817,888,647 Centralized model, distributing vs. mining

Source: Coinmarketcap.com

Data as of: 5/22/2014

Currencies are typically compared using common categories describing the total

value and capacity of each specific currency at their fullest designed utilization

Virtual Currency Landscape

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• Financial services and technology industry leaders such as Bank of America and

IBM are applying for patents and issuing guidance as economic opportunities in

the virtual currency sector rise

• Financial Crimes Enforcement Network (“FinCEN”) has issued guidance on

several topics and New York State financial regulators have acknowledged the

existence and use of virtual currencies

• In March 2014 the IRS stated that virtual currency is to be treated as property for

U.S. federal tax purposes

• Institutional investment in virtual currency companies is led by well known

venture capital and technology stakeholders such as Andreessen Horowitz, Accel

Partners, Lightspeed Venture Partners, Index Ventures, Tim Draper, Steve Case

and Google Ventures

• Early adopter online retailers have started to implement virtual currency

transactions pressuring competitors to adopt a solution − Overstock and TigerDirect announced acceptance of Bitcoin in January 2014

Virtual Currency Acceptance

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Gro

wth

Single Solution Providers May Hit Growth Ceiling

Aggregate Solution Providers

Growth Ceiling

Industry Should Favor Ecosystem Providers

Ecosystem Providers

Wallets, Exchanges,

Processors, Mining,

Financial Services

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Corporate Overview

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We provide a shopping and transaction experience across a variety of product categories

for both consumers and sellers who have few alternatives to conduct virtual currency

transactions, and complete end-to-end order fulfillment and customer service

Company Profile – What We Currently Do

Target Vendors

Existing Vendors

Customers

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Growth Strategy & Timeline

Development Phase: focus on R&D and build robust and scalable enterprise grade

ecommerce platform as an on ramp for customer acquisition • Add more vendors and products

• Integrate new service offerings

• Develop single account ecosystem access

Customer Acquisition Phase: focus on growing user base • Drive site traffic and new users

• Deliver additional products and services designed to broaden engagement across our customer base

Monetization Phase: focus on monetizing user base • Generate revenue from other service offerings

• Grow top and bottom line while maintaining lower fixed costs through scalable business model

Development

Customer Acquisition

Monetization

Time

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Ecommerce Vendor Growth Initiatives

Manufacturers

and

Exclusives

Drop Shippers

Affiliate Programs In Progress

On-Going

Discussions

Researching

Estimated Sales & Products Offered

Lo

wer

Hig

her

Typ

ical M

arg

in

Product Source

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Development Status – Beta Testing in Progress

Select Features Currently Built and Undergoing Internal Beta Testing

• Front end/user interface − Redesign layout and navigation

− Improve checkout and customer service workflow

− Real time pricing across 3 virtual currencies

• Back end/platform architecture − Cloud-based, cluster-ready framework

− API automation of certain processes

− Complete database overhaul using NoSQL model

• Vendor diversification and product growth − Increase product offerings to millions

− Increase vendors to over 10+

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Key Accomplishments

February 5 & 6

Begins Trading as a

Public Company &

Raised $1.875M

March 26

Strategic and

Lead Investor

in GoCoin LLC

February 13

BTCS.com

Purchased

June 28

Company

Founded

September 1

Website

Launched

January 13

Management

Team

Joins

April 3

Dogecoin &

Litecoin

Accepted

May 21

BCS 2.0

Website

Internal Beta

Testing Starts

April 1

Marcum appointed as

Independent Public

Accounting Firm

2013 2014

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Non-Financial Metrics

88

1,266

434

0

200

400

600

800

1,000

1,200

1,400

3Q2013 4Q2013 1Q2014

Products Sold

30

135 143

0

20

40

60

80

100

120

140

160

3Q2013 4Q2013 1Q2014

Total Products Offered (1,000s)

9

68 59 11

85 75 46

395

289

0

100

200

300

400

500

3Q2013 4Q2013 1Q2014

Unique Visits

Total Visits

Page Views

Site Traffic (1,000s)

106

750

1,429

0

500

1,000

1,500

2,000

3Q2013 4Q2013 1Q2014

Total Registered Users

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Notable Industry Comparables

Company Type Recent Investment Size Valuation

Coinbase1 Universal $25 million $125 million

Bitpay2 Processor $30 million $160 million

Circle3 Universal $17 million Not Disclosed

Source:

1. TechCrunch - December 12, 2013 (http://blogs.wsj.com/digits/2013/12/12/andreessen-boosts-bitcoins-legitimacy/)

2. Wall Street Journal - May 13, 2104 (http://online.wsj.com/news/articles/SB10001424052702303851804579558383014468104)

3. Wall Street Journal Blog - March 26, 2014

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Corporate Structure

Bitcoin Shop Inc.

(Nevada)

Bitcoinshop.us LLC

(Maryland) BTCS Acquisition Corp.

(Nevada)

GoCoin LLC

(Delaware)

100% 100%

Minority Investment

• Formed to capitalize on acquisition opportunities

• Focus areas include: − Offer products which are not typically offered online

− Technologies that are complementary to our business strategy

− Diversify our revenue stream

− Provide on-ramps for new users

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Capitalization Table

* As of: 5/22/2014

** The shares owned by management and founders are currently subject to a locked-up agreement until

February 5, 2015, subject to certain leak out exceptions. Additionally, shares held by management are

subject to restrictions imposed by Rule 144 under the Securities Act of 1933, as amended. Additional

information regarding management lockup can be found in our public filings at sec.gov.

Equity Cap Table* Shares % Basic % Diluted

Common Shares

Public Float 38,202,612 27.5% 23.4%

Founders & Management** 100,773,923 72.5% 61.7%

Total Common 138,976,535 100.0% 85%

Preferred Stock (as converted)

Series B Preferred 12,560,700 7.7%

Series C Preferred 3,750,000 2.3%

Total Preferred 16,310,700 10%

Warrants

Warrants (Strike @ $1.00, Expire 2/6/2017) 1,875,000 1.1%

Total Warrants 1,875,000 1.1%

Options (Unvested)

Founders & Management (Strike @ $0.50)** 6,201,472 3.8%

Total Issued (Unvested) Options 6,201,472 3.8%

Total Diluted 163,363,707 100.0%

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Management Team

Charles Allen, Chief Executive Officer, Chief Financial Officer, and Director

• Responsible for overall corporate strategy and direction as well as managing corporate finances

• Extensive experience in business strategy, investment banking, investing and capital markets transactions

• Strong engineering background with experience in the compound semiconductor field

• B.S. in Mechanical Engineering, Lehigh University, M.B.A. Mason School of Business at the College of William & Mary

Michal Handerhan, Chief Operating Officer, Chairman of the Board of Directors and Co-Founder

• Supports business and R&D strategy across the management team

• Team leader for the National Aeronautics and Space Administration (“NASA”) in their Peer Review Services group and web

2.0 developer at NASA’s Goddard Space Flight Center

• President and CEO of Meesha Media Group, LLC, delivering high-definition video services, web development, database

management, and social media solutions

• B.S. in Computer Science, Czech Technical University

Tim Sidie, Chief Technical Officer, Director and Co-Founder

• Leading our technology development and platform architecture

• Software Engineer II at the Space Telescope Science Institute supporting Hubble Space Telescope and James Webb

Space Telescope projects

• Software Engineer at NASA's Goddard Space Flight Center for the Direct Readout Laboratory, building software for earth

observing satellite systems

• B.S. in Computer Science, Ursinus College

Charlie Kiser Jr., Chief Marketing Officer

• Responsible for our corporate marketing and business development strategy

• 15 years in management and C-level roles in marketing, sales, business development and operations

• Highlights include Chief Operating Officer for 60 Degrees Pharmaceuticals, Director of Sales and Business Development

for Apiphany Inc., Vice President of Sales and Business Development for FortiusOne Inc./GeoIQ, Venture Mentor for

AccelerateDC, the Washington, DC Economic Partnership Mentorship Program

• B.S./B.A in Finance, West Virginia University

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Summary

• Bitcoin Shop, Inc (“Bitcoin Shop”) is an early mover in the virtual currency

ecosystem and one of first U.S. publicly traded companies in the space

• We plan to build a virtual currency ecosystem by using ecommerce as an on-

ramp

• Bitcoin Shop offers over 140,000 products for sale and plans to expand its

product offerings and vendor base

• Bitcoin Shop does not have inventory or a logistics chain but rather leverages its

vendor’s resources

• Virtual currency acceptance and regulatory guidance indicates the potential for an

increase in opportunities within the industry

• Management team offers the right combination of capital markets experience,

industry expertise, and business leadership

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Contact Info

Charles Allen Chief Executive Officer

Investor Contact Info

[email protected]

(202) 430-6576